An Analysis of Google’s Internal Management and Its Possible Application to Other Industries.

An analysis of Google’s internal management and its possible application to other industries. Tutor: Forss Geoff Student: Meng-Shen Chung Contents Abstract…………………………………………………………………………………………….. 02 List of figures……………………………………………………………………………………… 03 1. Introduction……………………………………………………………………………………. 04 2. Literature Review……………………………………………………………………………. 06 2. Work environment…………………………………………………………………….. 06 2. 2 Welfare system………………………………………………………………………….. 06 2. 3 Company culture……………………………………………………………………….. 07 3. Methodology…………………………………………………………………………. 08 4. Analysis and results…………………………………………………………………………. 09 5. Conclusion…………………………………………………………………………………….. 5 6. References…………………………………………………………………………………….. 16 Abstract Google is a company which is well known for providing a unique work environment, welfare system and flat structure for employees. It has also been awarded “The best company for work” many times. We are going to do the research on their internal management, and then define their key factors of success; moreover applying Google’s management to different industry. Keywords: Google, internal management, welfare system, work environment, different industry. List of figures Figure 1: SWOT analysis……………………………………………………………………. 08 ? Figure 2: SWOT analysis of Google’s internal management……………………. 09 ? Figure 3: SWOT analysis of Google’s internal management is applied on different industry (Manufacture)…………………………….. 12 1. Introduction In a company, the internal management is the most important factor. In addition, if a company has a good internal management, employees will not only enhance their effectiveness but also keep those employees with good performance to stay in the company and reduce errors.

Consequently, my topic is to investigate how the internal management encourages employees to be creative and effective. I am going to do the research on Google, which is a well-known search engine. Google’s internal management is also well known to the whole world for its work environment, welfare system and company culture. I have chosen this topic for my research report, on the one hand, I want to be a successful leader and I am going to study business management for my master degree.

On the other hand, my father and his friends are all successful businessmen, who always teach me some practical and professional knowledge about management and share their personal experiences to me. Furthermore, they once suggested me studying business management, which may be useful in the future, for the reason that if you want to organize a company profitably and prosperously, you must master in good management skills. As a result, I am Interested in business management. I strongly believe that a good management method could affect the whole enterprise.

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In different offices have various local customs of decoration and interior decoration (Google). 2. 2 Welfare system Google provides its employees with a wide range of benefits to make sure that the employees are satisfied and loyal to the company. These benefits include: free food, onsite childcare, healthcare services, transportation services, laundry and dry cleaning services, sport facilities, pets allowed, 20% creative time program, environmentalism, numerous holiday and leave days, and other services (Kuntze, R. and Matulich, E. 2010). The other companies have never executed these benefits mentioned above.

In addition, their welfare system has few innovative rules, “The company has a policy of unlimited sick leave, and only expects employees to work 70% of the time. It factors in opportunities for staff to think of ways to work better, and allows impromptu sport during the work day. ” (Logan, 2008:3). 2. 3 Company culture Although Google is a Large-scale company, their leader tries to maintain their atmosphere feels like a small company without hierarchy, employees can say whatever they want to say, they can bring up all of their ideas or thinking to their manager whenever they want. Google). Furthermore, Google attempts to keep the good employees in the company and have a good relationship between leaders and employees. Every Friday afternoon the founders gather all employees into an open area for a TGIF meeting. (Raphael: 2003). 3. Methodology A SWOT analysis is a well known management tool, one of which could very quickly to find strengths and weaknesses. It could apply to all kinds of research. That is the reason why SWOT is one of the most common used management tools recently. Strengths |Weaknesses | | | | |Opportunities |Threats | | | | Figure 1: SWOT analysis table. In this research does not need to calculate the data. SWOT analysis is one of suitable management tools in this research, it is also easy and clear to use and understand.

Therefore, I will use SWOT to analyse Google’s internal management, after that I will apply Google’s management method to manufacture industry, and do the SWOT analysis again, interpreting the analysis according to my own working experiences. First of all, the data will be collected from Google website and my work experience, moreover, some of the research which had published from experts. The collected data will be consisting of work environment, employee’s welfare system, company culture, relationship between leader and team members. After that, using SWOT analysis to analyse all the aspects mentioned above.

Followed by an investigation to see whether Google’s internal management can be applied to different industry or not. 4. Analysis and results |Strengths |Weaknesses | |Good work environment. |High costs. | |Good welfare system. |Low pay. | |Keep structures flat. |Lost in the crowd. | |Opportunities |Threats | |Create new policy for welfare system. More and more competitors use the same method. | |Encourage employee to work at home. | | Figure 2: SWOT analysis of Google’s internal management. Strengths Google’s internal management has many strengths, one of strengths is that all of its offices have good work environments; they design different interior decorations according to different culture, and build up many recreational facilities, for the sack of reducing stress as well as increasing creativity and efficiency.

The second strength is good welfare system, Google formulates some benefits not only to keep the good employees and encourage them to do their best but also devote to the company. Hamel reports that The Founders’ Awards, an annual multimillion dollar payout to teams who’ve made outsize contributions to Google’s growth, is one key retention mechanism The goal: to ensure that internal entrepreneurs have no incentive to take their best ideas somewhere else. (2006: A16).

The third strength is to keep structures flat, in a large company usually has hierarchy that would waste lots of time on paper works and have difficulty in retaining a good relationship between high level managers and low level employees, however Google try to keep the office’s atmosphere like a small company. In Google, employees could raise their queries or propose their ideas to the managers or founders directly. It is unlike usual management which needs lots of paper works. Weaknesses Certainly, not everything could be perfect; Google also has some problems about its management.

The first problem is cost; Google spends about 50% of revenue on their welfare system. (Kafka, 2009). Although founders thinks that could increase productivity and efficiency of the organization, the budget of welfare system spending still too much. The second problem is low salary, Google sets up many employees’ benefits and bonus system are better than other competitors; however, their pay is lower than the others. Most of Google’s employees have fixed salaries that are significantly lower than the industry average, even when those base salaries are supplemented by stock options. (About. com 2009).

The last example is lost in the crowds, the problem is some of employees want to issue their ideas but there are too many ideas in Google. Consequently, employees feel depressed when they can not issue their ideas. Hardy (2007) reports that with more than 20,000 people working for Google, some people feel their ideas are lost in crowds. It is a highly competitive environment with everybody trying to make the next “in” thing. Opportunities Google could create new policy or develop their welfare system, trying to find the new thing could let workers pay more attention to their works and elevate employee’s creativity.

In addition, encourage employee to work at home. Even though offices are decorated like home or any places make employee feels relaxed, it is still a office not home, as s result, enable the workers to work at home could be one of the new solution to increase efficiency also reduce the costs. Threats After Google created the new vision of internal management, there are more and more enterprises copying Google’s management method, not only the same industry but also others industries and applied to their companies. Accordingly, Google’s competitors could provide the same or better condition o attract Google’s good employees to their company. |Strengths |Weaknesses | |Good work environment. |Working environment atmosphere too relax. | |Good welfare system. |Poor management. | |Opportunities |Threats | |Good relationship between managers and employees. |Worker’s education level. | Figure 3: SWOT analysis of Google’s internal management is applied on different industry (Manufacture).

Strengths All of the employees who are from different industries, they all need to work at a good environment. In manufacture industry, employees work at dangerous environment, they need a place to release their stress. Like Google’s office, there are many places or equipments to help their workers reduce their stress. The next point is welfare system, most of the manufacture companies use original management, they do not have a good welfare system. As a result, if manufacture companies use Google’s management method might urge worker’s morale.

Employees would feel satisfied staying in the company for a long time, it is good for those manufacture companies, because in this industry, company prefer employee who has long experience. In manufacturing, experienced worker’s efficiency is more than apprentice. Weaknesses Many employees find the work environment far too much fun and perhaps even an ‘overload’ of happiness. Most workers are able to find their focus and sanctuary at work but for some, a more professional and structured work environment is necessary. Arrington, 2009). In manufacture industry, workers should be very engrossed when they are working. If employees feel too relaxed when they were working, an accident might happen. The other point is hierarchy structure, most of employees who work for manufacture industry, and the education level is less than employees who work for information industry. Thus, in manufacture industry should use hierarchy structure to contain every step, because it would be easier to find the problem if error happens during the process.

Moreover, the last point is industry’s character is different, the duty of the manufacture industry is to produce goods, company must have done their work in time, however information industries mainly focus on creating new things, time is not a big issue as for them. Opportunities As we known, manufacture industry usually use original management. This management has a big gap between leader and worker, because they are very difficult to meet each other. Using Google’s method might ameliorate the relationship between leader and worker.

Thanks to the low hierarchy, workers and managers can interact intimately, in this way; relationship between them will definitely become closer. Threats The Google’s management style is free; it gives their worker to organize their time management by themselves. Although Google’s employees have a lot of free time, they still do their job very well. The main problem is education level. In the information industry, most of employee’s education levels are higher than people who are working for the manufacture industry.

The meaning is high level education employees are more positive, their time management organization are better than those employees with low level education. 5. Conclusion I used SWOT analysis to define the unique aspects of Google’s management and assumed that it is applied to different industries; I learned two important points from this research as well. The first one is that I understood why Google can win “The best company for work” many times. Actuality, Google’s salary is lower than industry average but it

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